The term Financial method or Financial tool refers to any logical method technique to be employed for accomplishing the following goals:
1.Measuring of effectiveness of firms actions and decisions.
2.Measuring the validity of the decisions regarding accepting or rejecting the projects.
Following are the important financial tools used.
1.Cost of capital-
2.Trading on Equity:
3.Capital Budgeting appraisal-
4.Ratio analysis:
5. ABC Analysis:
6. Fund flow analysis and cash flow analysis:
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